Finance Committee on June 5th, 2012

[An hon. member]

Hear, hear!

[Randy Hoback, Conservative, Prince Albert, SK]

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Hoback.

Mr. Brison, please.

[Scott Brison, Liberal, Kings—Hants, NS]

Quickly, Mr. Chair, the government hasn't made a compelling case for rushing through this change, and in my opinion we've not heard from enough witnesses from the farm industry, so we're opposed to this.

[The Chair, Conservative, James Rajotte]

Thank you.

(Clauses 473 and 474 agreed to on division)

(On clause 475)

I will ask Ms. Nash to move amendment NDP-45.

[Peggy Nash, NDP, Parkdale—High Park, ON]

I move amendment NDP-45.

[The Chair, Conservative, James Rajotte]

Okay. I have a statement on NDP-45: it is admissible.

[An hon. member]

It is?

[Peggy Nash, NDP, Parkdale—High Park, ON]

Hurrah!

[The Chair, Conservative, James Rajotte]

I wanted to put a happy face on that.

The legislative clerk got really nervous when I said that.

(Amendment negatived)

(Clause 475 agreed to on division)

Okay.

Thank you, Ms. Barnes, for being with us here tonight.

We'll move to division 27, clauses 476 to 478, on amendments to the Statutory Instruments Act.

(Clauses 476 to 478 inclusive agreed to on division)

We'll move to division 28, the Investment Canada Act, with clauses 479 and 480.

On this division, Ms. Nash?

[Peggy Nash, NDP, Parkdale—High Park, ON]

With regard to the Investment Canada Act, in 2010 Parliament voted unanimously to pass an NDP motion identifying serious problems with the Investment Canada Act, committing the government to making specific improvements. But these proposed changes really don't live up to that promise. There has been great concern over the definition of net benefit to Canada. What does that mean when we have seen foreign investments authorized, takeovers carried out, jobs lost, technology moved out of the country, and BHP's high-profile attempt to take over PotashCorp? There was no definition of net benefit to Canada, but the government opposed that takeover.

The only other time the government has stood up to a foreign takeover or foreign investment was in the case of MacDonald Dettwiler. It was the very first time this investment had been blocked. The company had launched very important RADARSAT technology. It was something the government had talked about as being essential to Canada's protection of the north, of the Arctic, and then within weeks there was an announced takeover of this company and sale to the largest American munitions manufacturer. The minister at the time, ultimately, in the face of significant public pressure, decided to block the foreign takeover.

The rules are not clear. They're sporadic, and there are many Canadians who do not feel the rules work in their interest, because affected communities have no say. There is no open, democratic process for people to have input into hearings when there's a proposed takeover. The people who are directly affected, who work for a company, have no opportunity to participate in hearings, and there are, as I said, no clear rules about net benefit to Canada.

The government here is making a very modest change, in the sense that merely having companies pay a fine in the form of security rather than cash really doesn't change the basic rules of the Investment Canada Act. That's just unacceptable for Canadians. We've had so many foreign takeovers and so many cases of people being thrown out of work, companies being closed down, and technology being taken out of the country.

We need foreign investment. We want foreign investment, but we need clear rules, clear accountability, a process that allows for democratic input, and a process that ensures that Canadian interests are protected. We don't see those things in the amendments that are proposed. They're very inadequate.

[The Chair, Conservative, James Rajotte]

Thank you.

I'll go to Mr. Adler, please.

[Mark Adler, Conservative, York Centre, ON]

Thank you, Chair.

Nothing, really, that Ms. Nash says could be further from the truth. I know the NDP wants to return to the days of the Foreign Investment Review Agency. They pine for that time when jobs and investment were driven out of Canada.

We all know that foreign investment provides significant benefits to Canada through knowledge, capital access to new markets, and the creation of high-value jobs right across the country. Our government is committed to an open investment framework that encourages foreign investment in Canada as well as Canadian business investment abroad, while of course safeguarding Canada's interest.

The Investment Canada Act requires the review of significant foreign investments in Canada in order to ensure the investments bring a net benefit to our country. To help strengthen investor confidence, the government will introduce targeted improvements to the administration of the act in the interest of greater transparency while preserving investor confidentiality.

I would like to ask Mr. Peets if he could comment on the review mechanism in the Investment Canada Act and the guarantee that what we're dealing with here is a mechanism that will guarantee a net benefit to Canada.

[Gerard Peets, Senior Director, Strategy and Planning Directorate, Department of Industry]

What I can do is discuss the net benefit factors that are included in the Investment Canada Act. They're listed in section 20 of the ICA, and they include the effect of the investment on the level and nature of economic activity in Canada, including employment, resource processing, and utilization of parts, components, and services produced in Canada; the degree and significance of participation by Canadians in the Canadian business; the effect of the investment on productivity, industrial efficiency, technological development, product innovation, and product variety in Canada; the effect of the investment on competition within any industry or industries in Canada; compatibility of the investment with national industrial, economic, and cultural policies; and finally, the contribution of the investment to Canada’s ability to compete in world markets.

[Mark Adler, Conservative, York Centre, ON]

As you can see, Mr. Chair, they are quite stringent criteria when we're talking about net benefit to Canada. So I would once again say that what the NDP is saying could not be farther from the truth, and I would encourage them once again to read at least the legislative summary of the budget implementation act before they run off to any unfounded and unsound conclusions of their own.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you.

[Peggy Nash, NDP, Parkdale—High Park, ON]

A point of order.

[The Chair, Conservative, James Rajotte]

A point of order, Ms. Nash.

[Peggy Nash, NDP, Parkdale—High Park, ON]

I would like to ask Mr. Adler, through you, how he can possibly lecture us on whether or not we've read the legislation. Of course, we've read the legislation, and I don't appreciate his repeatedly lecturing us on the assumption that somehow (a) we have not read it or (b) we don't understand it. I just find that offensive.

[The Chair, Conservative, James Rajotte]

Okay.

I again just caution members to stick to the actual substance, put their arguments on the table, and move forward as quickly as possible here. That's my advice to all of you, for the thousandth time tonight, but not the last, I assume.

The floor is yours, Ms. LeBlanc.

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

Thank you, Mr. Chair.

Thank you for letting me take part in this meeting.

The government has been promising for a long time to tighten up the Investment Canada Act. But it refuses to let Parliament do its job, which is to examine the proposed changes in an appropriate forum. The Standing Committee on Industry, Science and Technology has also asked that the Investment Canada Act be reviewed.

In 2010, the House passed Mr. Layton's motion to reform the Investment Canada Act. It included a commitment that public hearings would henceforth be part of the process of examining foreign takeovers. The process required public disclosure of the conditions attached to any foreign takeover, a transparent process for monitoring the performance of foreign entities and clear penalties in the event of non-compliance.

The motion recognized that the purpose of the act should be clarified in order to encourage new capital and job creation rather than the takeover of strategic resources. Last February, the Standing Committee on Industry, Science and Technology unanimously passed a motion that the committee undertake a review of the Investment Canada Act.

But the government is reneging on its commitment to work with the opposition parties, investors and the communities and workers affected and is making changes to the act by way of regulations.

The government has long promised to fix the broken Investment Canada Act, but these changes will actually negatively impact communities and workers. The government is refusing to let Parliament consider the legislation and is instead slipping change in through regulation.

Even the current changes to the Investment Canada Act do not go far enough. Canadian companies are disappearing and, as has already been mentioned, the concept of net benefits to Canada has not yet been clearly spelled out. I believe that it would be appropriate to conduct an in-depth review of the Investment Canada Act in a suitable forum. The objective is for industries, workers and communities to benefit from foreign investment. If possible, conditions should be established in a positive way so that the foreign investments provide benefits for employment, for our communities and for Canada.

As you mentioned, Canada invests overseas. So Canada could certainly benefit from investments too. But they must have a positive effect, in the sense that they must establish long-term relationships that benefit communities, business and labour.

[The Chair, Conservative, James Rajotte]

Okay.

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

Provisions dealing with Investment Canada have been included in this omnibus bill that has been submitted for study to the Standing Committee on Finance. But we feel that the Investment Canada Act needs to be studied in depth and that the review should be done by the Standing Committee on Industry, Science and Technology.

Thank you.

[The Chair, Conservative, James Rajotte]

Okay, thank you.

Is there any further discussion on this? No? Okay.

(Clauses 479 and 480 agreed to)

Thank you, Mr. Peets.

We'll go to division 29, the Customs Act.

(Clauses 481 and 482 agreed to)

We will go to division 30, clause 483, the Pension Benefits Standards Act, 1985. I have no amendments here.

(Clause 483 agreed to)

Next is division 31, the Railway Safety Act, clauses 484 to 486.

On that division, Mr. Brison.

[Scott Brison, Liberal, Kings—Hants, NS]

Just on this point, we asked to hear from affected groups, such as the railway companies and the Federation of Canadian Municipalities, but due to the short notice they were not available to appear before us. I point that out to again draw attention to the fact that the committee has not heard from some very important stakeholders on some of these changes.